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Who will bring user-generated content to out-of-home media?

Author: Bill Gerba on 2007-03-17 18:17:23

Last week's article about showing user-generated content on digital signs identified a few key factors -- manageability, accountability, responsibility and trust -- that need to be addressed before UGC can make its way from consumer craze/occasional marketing novelty to a full-fledged member of the advertising ecosystem. Given the large scope of these four roles, companies aiming to provide these services are in for a real challenge, especially if they hope to woo the best brands, advertisers and signage networks. However, it's no secret that increasingly fickle consumers are going to great lengths to ignore mass media advertising. This trend, combined with the dramatic growth rate of in-store and out-of-home advertising, creates a sizable opportunity for a select group of companies. So as promised last week, today we're going to look at what sort of organizations are best poised to bring user-generated content to out-of-home media.

Who's in the best position to distribute user-generated content?

Allowing regular consumers to start producing content that could be seen across the globe means that brands and agencies must give up some control, which could lead to unpredictable results and incoherent brand messages. Some group has to be able to mitigate that to the greatest extent possible, and my number one pick for such a group would be a major search engine company, and in particular, Google. Tens of millions of consumers use one of the big three search engines every day. This puts Google, Yahoo! and Microsoft in a prime position to monitor trends, since they can measure the search activity and relevance for millions of topics in near-real time, even correlating the results with demographics, geographic location and other data that would be extremely useful to advertisers and out-of-home venues alike. Additionally, they're already comfortable working with media at a very large scale, and they already have the trust of a huge number of consumers and businesses.

Besides their reach and brand caché, every major search engine is already funded by advertisements, and out of necessity they've either built or acquired extremely complex and capable automated ad management systems. My favorite example, Google's AdWords, uses complex heuristics to determine the relevance between ads and their associated keywords, and creates automatic auctions to give prime placement to ads that perform the best and have the highest bid prices. The system also removes underperforming ads automatically, ensuring that consumers see high-quality and relevant content. It's not hard to imagine a similar system placing ads onto a diverse network of digital signage screens. Similarly, major Internet auction houses are good candidates to fill the role of out-of-home media arbiter. For example, eBay is working on selling cable TV ad slots via an auction system. While still in the very early stages (indeed, a number of networks haven't even been allowed to participate yet), it's an indicator that eBay is serious about the prospect of auctioning ad inventory just like any other more tangible asset.

While eBay, Yahoo! and Google are all household names and certainly have the respect of many businesses, retailers and advertisers, they still have little experience in the media world. Despite experiments with serving ads in traditional media, they are arguably venturing into uncharted territory. Consequently, while some advertisers, agencies and media have expressed interest in working with these companies on collaborative marketing projects, there’s still a good deal of skepticism in the industry. These companies will have to address serious issues surrounding content licensing, playback monitoring and reporting, collaboration with other content sources and suppliers, and monetization models before being able to step in as media arbiters. Likewise, somebody will have to answer the measurement question if that's going to be part of the equation for getting venues and content creators paid. Will the media economy be based on raw impressions, improvements in awareness and recall, net sales lift, or some other ancillary benefit? Right now, nearly every digital signage network out there seems to have a different business model, but obviously that's not a practical situation if the networks want to band together to attract larger advertisers.

How can you get involved?

• If you're an out-of-home network owner, the availability of brand-sanctioned UGC could mean more opportunities to attract national advertisers, particularly if you have a smaller network but participate in a "group plan" with other small network owners. The biggest advantage to the ad-clearinghouse model is that the ads sell themselves according to a set of heuristics -- and if you ask anybody who's tried to sell advertising space on a digital signage network, they'll tell you that this alone could change the nature of advertising-driven digital signage. Aside from advertising, UGC also brings the prospect of cheap and plentiful entertainment-style content to those networks that can utilize it (for example, bar and restaurant signs). As an added bonus, the new tools and companies that crop up to service the UGC economy will improve local ad sales too, bringing additional relevance to your place-based media.
• For content creators, access to a large number of digital signage networks means more places to license and display your content. Amateurs and budding professionals looking to make a name for themselves are already taking advantage of the Internet as a way to show off their wares to a huge audience, and access to public environments through out-of-home networks will be an even more alluring target. Of course, while UGC may augment the existing supply of marketing content, it's safe to say that major brands will continue to engage professional ad agencies for their core campaign strategy and content creation needs in the foreseeable future.
• For brands and advertisers, the jury is still out as to whether (network) size is everything. While grouping a bunch of small but heterogeneous networks together (for example, multiple bar and restaurant networks) might appear to be synergistic, melding multiple heterogeneous networks together may not be as compelling for marketers. On the other hand, if a marketer's goal is to reach a wide and diverse audience, a large, heterogeneous network could be exactly the right medium for reaching the desired slice of the population. Also, participating in an aggregation program isn't going to prevent advertisers and individual network owners from dealing with each other directly, so brands and agencies will still be able to finely target their messages to individual networks or even individual locations if desired.
• For venues that host out-of-home networks, the advantages of using UGC delivered over an aggregated network are less clearly defined. For example, private label and other brand-conscious retailers will stay away from most amateur content and especially automatically-selected ads for the near future, though Google and others will likely make some high-profile trials. On the other hand, I think that many non-retail public networks will be able to gain considerably from the wider array of content options available to them. UGC will work particularly well in those networks that can benefit from entertainment content and unusual advertising promotions. Also, there are still a large number of venues interested in deploying digital signage networks that have been hesitant to get started because of the difficulty in securing content or offsetting some costs with advertising. For them, being able to deploy a small number of screens and immediately become part of a larger network could be the difference between taking a loss and achieving a positive ROI.

User-generated content is poised to play a starring role in the future of out-of-home media. But for this to occur, the industry needs content arbiters who carry the authority to make media buying and placement decisions for advertisers and network owners. It's far too early to say whether eBay or Google or someone else entirely will step up to provide such a service to the nascent digital signage market, but if there's demand, it's safe to say that companies will start trying to meet it. In fact, smaller firms like SeeSaw Networks and Artisan Live are already trying to attack the market from their own unique perspectives, and I think we'll see a few more startups and tangentially-related players try their hand at providing a cohesive solution before long. Hopefully, someone will be able to figure out the secret recipe for meeting the manageability, accountability, responsibility and trust demands that I've detailed in the past few articles, since user-generated content promises to be a very good thing for the out-of-home media industry.

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